The preliminary peace agreement – more than an armistice, less than a treaty – reached in the Bohemian town of Nikolsburg on July 26, 1866, reflected the initial outcome of the Austro-Prussian War of 1866 after the decisive Battle of Königgrätz on July 3. Prussia’s victory resulted in the dissolution of the German Confederation, Austria’s forced withdrawal from German affairs, and the inauguration of the North German Confederation under Prussia’s leadership. The Preliminary Peace [Präliminarfrieden] regulated the situation between Prussia and Austria until the Treaty of Prague, signed on August 23, formally concluded hostilities between them. In the Nikolsburg negotiations, Bismarck confined himself to relatively modest claims against Austria. Austria had to pay a substantial indemnity but lost no territory to the victor. Due to French and Austrian lobbying, Bismarck also had to respect the territorial integrity of the Kingdom of Saxony, which had fought with Austria on the losing side during the war. By granting both Austria and Saxony generous peace terms, Bismarck hoped to attract the German states south of the River Main, who remained independent and outside the North German Confederation, into a new, larger union at some point in the future.

Art. I. With the exception of the Lombardo-Venetian kingdom,* the territory of the Austrian monarchy remains intact. His Majesty the King of Prussia engages to withdraw his troops from the Austrian territories occupied by them as soon as the peace shall be concluded, under reservation of the arrangements to be made upon the definite conclusion of the peace for guaranteeing the payment of the war indemnity.

Art. II. His Majesty the Emperor of Austria recognizes the dissolution of the Germanic Confederation as it has existed hitherto, and consents to a new organization of Germany without the participation of the Empire of Austria. His Majesty likewise promises to recognize the closer union which will be founded by His Majesty the King of Prussia, to the north of the line of the Main, and he declares that he consents to the German states south of that line entering into a union, the national relations of which, with the North German Confederation, are to be the subject of an ulterior agreement between the two parties.

Art. III. His Majesty the Emperor of Austria transfers to His Majesty the King of Prussia all the rights which the treaty of Vienna of 30th October, 1864, recognized as belonging to him over the Duchies of Schleswig and Holstein, with this reservation, that the people of the northern districts of Schleswig shall be again united to Denmark if they express a desire to be so by a vote freely given.

Art. IV. His Majesty the Emperor of Austria undertakes to pay His Majesty the King of Prussia the sum of 40,000,000 thalers to cover a part of the expenses which Prussia has been put to by the war. But from this sum may be deducted the amount of the indemnity for the costs of war which His Majesty the Emperor of Austria still has the right of exacting from the Duchies of Schleswig and Holstein, by virtue of Article XII of the Treaty of Peace of 30th October, 1864 before cited, say 15,000,000 thalers, with 5,000,000 in addition, as the equivalent of the cost of providing for the Prussian army, maintained by the Austrian countries occupied by that army until the time of the conclusion of the peace.

* The Lombardo-Venetian kingdom was ceded by Austria to Italy by the Treaty of Prague of 23rd August, 1866. [Footnote from Theodore S. Hamerow, ed., The Age of Bismarck: Documents and Interpretations. New York: Harper & Row, 1973, pp. 68.]